First let me say that I know NOTHING about weflare plans. I'm not even sure this question makes sense....However, we have a client that has a self-insured plan. They have an owner employee that went on Medicare beginning in January of this year. He is paying his medicare premiums. However, it was his intention to have his RX drugs paid from the self insured plan. He has been paying for them personally. Can he submit his receipts for RX he purchased during the year to the Welfare plan and be reimbursed? Sorry if this is a stupid question. Thanks.

A colleague is studying for her ASPPA exams, and she has been given advice I do not agree with. For a new plan effective January 1, 2005, she has been told that there are no highly compensated employees due to compensation greater than $90,000. The reasoning is that there was no prior plan year. However, the company itself was started in 2000. Therefore, my argument is that there are HCEs based upon prior year's compensation since the look-back year is "the twelve month period prior to the determination year". In this instance, the calendar year election is immaterial since the plan year is the calendar year.

Can someone please clarify?

Thanks!

A plan sponsor of a self-funded group welfare plan wants to reimburse themselves for consulting fees on their plan. We are the TPA and feel this may be a prohibited transaction and are also concerned about our role in this request as a fiduciary. We bill the client by location and cut the checks for administrative expenses, stop loss, etc. They are requesting that we add an amount per member per month to the bill for their consulting on the plan and then once each location has paid, cut a check back to the company for that amount. They do contribute a good deal of time in the administrative aspect of the plan so therefore feel this is a justified expense to the plan. Has anyone ever run across this situation because we have never heard of this being done?

anyone think this is a problem: partner/doctor requests proposal from tpa/ria firm in which son-in-law is an employee. ultimately dr decides to hire tpa firm to administer and be ria to the plan.

When a medical claim is initially denied, ERISA requires that the claimant be informed, among other things, of the specific reason for the denial and that reference be made to the specific plan provisions. Does this mean a claimant must be informed to look, for example, at a specific page and heading of a plan booklet, or would it suffice to simply inform the claimant to review the general limitations and exclusions as set forth in the plan?

I have a plan(nursing home) that has been carrying account balances for as long as 30 years. Back then, no SS#'s were required for our software. The client has been trying to go through 30 years of records for the SS#'s since they are now shutting down the plan. Has anyone had a similiar situation? The letter forwarding program and automatic rollover program is useless without SS#'s. Any other alternative available to get the money out the plan with no SS#'s? Thanks.

Linda Michals

Plan covers both union/non-union employees and uses a non-safe harbor definition of comp for adp testing purposes. Does the union portion of the plan need a 414s test?

A participant in the multiemployer welfare fund has what is called a dollar bank and for each hour he works he earns an amount equal to the contribution rate for the Fund. Upon establishing the required contribution amount in his dollar bank, the participant becomes eligible for participation in the Fund. If the participant has a shortfall in his dollar bank, he is allowed to self-pay in order to maintain he coverage. If the participant has a balance in his Dollar Bank that does not meet the eligibility for coverage, and he does not choose to make self-payments to maintain coverage, the participant will be offered COBRA. If the participant does not elect COBRA and he does not provide documented proof that he is eligible and enrolled in other health coverage, any existing Dollar Bank balance will be forfeited.

Is it legal for the Fund to forfeit the participant's balance in his dollar bank keeping in mind that the contributions are part of a wage package?

Thanks

I find very often that prospective clients will tell me that they have funded a SEP already for the year, but are looking for a larger tax deduction. Of course they are just uninformed and don't realize that by funding the SEP prior to year end they have eliminated other planning opportunities.

I have heard "people" mention that if the SEP contributions are backed out as a mistaken contribution because the deposits were ineligible, you can then fund a qualified plan. I suppose this is more of a grey area, but I am looking to see what other people are advising clients.

The clients aren't looking to deduct contributions to both plans, its just that no one told them they shouldn't fund. In fact their financial advisor is probably telling them should fund as soon as possible to get the assets under management.

So what are you guys and gals doing? Is it just tough luck, you have to wait till next year?

My company is going to be implementing a FSA Debit Card for our clients. A question came up about when a participant disputes that a charge occurred. For example, participant walks into a drug store and swipes their card for $20. When they get their FSA Account Balance Statement, they see that there was 2 charges for $20. The card company that we are going through says that VISAs dispute process can take upwards of 180 days to make a determination. My question is what happens at the end of the year (and grace period if applicable) if it is determined that the $20 was a faulty item, and as a result, the $20 gets put back into the participants account. Since the plan year is technically over, they can not submit an expense to obtain that reimbursement for the $20. At that point is it forfeited based on the Use-it-or-lose-it rule? Can the money be returned back to the participant as part of a mistake clause or something like that? My concern with that is that they are then receiving tax free money without having an eligible expense. Can the money be returned, but then taxed? If that is the case, then W-2's and taxes would have to be redone at that point as well. Has anyone run into this before? Thank you in advance for your assistance.

I have a client who died 7/15/06. She was 85 years old and left three (3) siblings as beneficiaries. I have attempted to answer the following questions posed to me by her CPA. Can someone confirm or guide me to the correct anwsers.

Many Thanks!

1. When must they transfer to Inherited IRA? No later than December 31, 2007. The end of the year following the year of the IRA owner’s death.

2. When must they take the first distributions from the Inherited IRA? By December 31, 2006. Since owner is receiving 70 ½ distributions a distribution must be taken for plan year ending 12/31/06 payable to each beneficiary.

3. Is a distribution required to be made to the estate for the deceased for year of death? Not required.

4. Can the inherited IRAs be annuitized over the respective lives of the three siblings?. Under the new Pension Protection Act, for distributions made after 12/31/06, a non-spouse beneficiary can rollover the IRA or take a lump sum.

Question is: does the plan hold more than 20% of it's assets in a single security?

My question is, what if more than 20% is held in a single mutual fund? Or a separate account?

I know that this item applies only to pooled accounts, which mine happens to be.

I would have assumedthat the instructions would have clarified on this obvious question, but they do not seem to shed any light.

I am tryign to allocate 10,000 to five employees. If I use the limits for 2006 with 613,821 as my total compensation, I have 2 employees not receiving any money at all. What am I doing wrong?

Here is the comp of all five employees.

137,500.00

220,000.00

200,000.00

36,833.42

19,487.82

I am trying to change my username, but I don't see any options for doing this. help!

Would a County Hospital qualify as a government entity exempt from ERISA? County Hospital is established by the county pursuant to state statute and is run by the county (as opposed to a private non-profit)

W-2 Contribution Cont. %

NHCE $12,480.00 $268.00 2.15%

NHCE $44,325.00 $953.00 2.15%

HCE $210,000.00 $13,339.00 6.35%

HCE $6,510.00 $140.00 2.15%

I was asked to review a plan with the above contributions and contribution perecntages for 2005 plan year. Plan is and was TOP HEAVY as far back as I was provided data - 2002. Plan passed the required tests, and is using the 3/1 gateway.

Seems like the NHCE's should have received a 3% contribution, or have I missed something here.

Bill

Have a plan where a non-owner received an RMD in 2003 and 2004, then signed paperwork to stop receiving them for 2005 going forward. Allowed????

I'm trying to figure out whether the new diversification notice due on 12/1/06 is necessary for a plan that has always allowed participants to freely diversify employer stock. Granted, these participants have never been eligible to exercise their right under ERISA 204(j) because 204(j) is not yet effective. On the other hand, the plan has never restricted diversification to the point where it would have violated 204(j) (if it were in existence). I'm leaning towards giving the notice since there is no harm that could come from providing it, but was looking for some input.

A multiemployer plan has a large claim (in excess of 100k) and seeks to obtain information as to the identity of the individual making the claim. The plan is a small local union (Local Union A) and the trustees of the plan are concerned that the insurance company made a mistake in assigning the claim to their plan. Another small local union (Local Union B) in the area had a claim that is similar to what has been described to Local Union A and, therefore, Local Union A believes that the insurance company made a clerical error in assigning the claim to Local Union A's plan. How can the info. legally (keeping in mind the HIPAA regs) be obtained from the insurance company to verify that the individual making the claim is member of Local Union A and not B?

Thanks

A participant in the multiemployer welfare fund has what is called a dollar bank and for each hour he works he earns an amount equal to the contribution rate for the Fund. Upon establishing the required contribution amount in his dollar bank, the participant becomes eligible for participation in the Fund. If the participant has a shortfall in his dollar bank, he is allowed to self-pay in order to maintain he coverage. If the participant has a balance in his Dollar Bank that does not meet the eligibility for coverage, and he does not choose to make self-payments to maintain coverage, the participant will be offered COBRA. If the participant does not elect COBRA and he does not provide documented proof that he is eligible and enrolled in other health coverage, any existing Dollar Bank balance will be forfeited.

Is it legal for the Fund to forfeit the participant's balance in his dollar bank keeping in mind that the contributions are part of a wage package?

Thanks